The housing market is on the way up, and the latest building approvals figures will support the recovery

The housing market is on the way up, and the latest building approvals figures will support the recovery. ANZ researchers say in their latest housing market report that home prices are expected to lift by 15 to 20 per cent over the next 2½ years, with investor demand one of the key drivers. blah blah blah

“Despite speculation that strong price gains represent the early stages of a house price bubble, prices on the whole remain largely explained by sharply improved affordability and the release of pent-up sales demand created over recent years,” ANZ researchers David Cannington, Paul Braddick and Ivan Colhoun say.

They say the price rises will be supported by a low interest rate environment and pent-up demand for housing.

But they caution that the difficulties in deposit affordability, higher unemployment and continued caution from both households and lenders will make the price gains relative modest compared to previous recoveries.

At the same time, the researchers said they expected the housing construction upturn to be modest, due to the following reasons:

A desynchronization of state housing market and dwelling type cycles will restrict the rebound in dwelling investment

Rising vacancy rates and growing valuation risks in some markets are likely to slow apartment completions

The development issues that have plagued the industry in recent years largely remain in place (including difficult approvals processes and infrastructure shortages)